Mortgage Tax Refund

Mortgage Tax Refund

As it is the middle of tax season, it seems appropriate to mention an underutilized provision of the Tax Law that could result in a mortgage tax refund. There is a New York State income tax credit against the paid mortgage tax.  See: Tax Law, Article 22 Personal Income Tax.

Properties that qualify for a refund are:

  1. All commercial property which has been financed and paid a mortgage tax to New York State from January 2, 2011 to the present.
  2. Any residential property consisting of 7 or more occupied units which has paid a mortgage tax from January 2, 2011 to the present.

The credit is normally taken and flows through to the NYS K-1 form.  Typical credits range from 9% in New York City; 19% in Westchester, and up to 24% in Nassau and Suffolk.

Remember, this is an income tax issue.  Your CPA might be aware of the availability of this refund, but it certainly will help if you provide that CPA with the details of that mortgage closing, the most important aspect being the amount of mortgage tax paid.  Again, this is an income tax issue, so all questions should be addressed to your CPA.

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